Tausi Insider

Once burning-hot Canadian house prices are expected to tumble a total 17.5 per cent from their peak, roughly double the fall during the 2008-09 financial crisis, in a slowdown already well under way, according to a Reuters poll of market experts. A succession of rapid-fire Bank of Canada interest rate rises that has taken the overnight rate from near-zero to 3.75 per cent in just eight months has removed some steam from the market, with a doubling in the average five-year mortgage rate to near 5 per cent. But after a more than 50 per cent rise in house prices during the pandemic on top of what was already seen as one of the world’s most expensive property markets, that expected fall would not be enough to bring prices to affordable levels. With a debt to net disposable income ratio of 1.85, Canadian households are among the top most indebted in the world and more vulnerable to higher rates given their higher exposure to variable rate mortgages. Peak-to-trough correction forecasts in ...

The number of Americans filing new claims for jobless benefits increased moderately last week, pointing to a still-tight and strong labour market despite growing fears of a recession as the Federal Reserve fights to dampen demand. Though the weekly jobless claims report from the Labor Department on Thursday showed unemployment rolls, or the so-called continuing claims rising to a 10-month high in late November, economists cautioned against reading too much into the move as the data are volatile around this time of the year. Labor market tightness and resilience keeps the U.S. central bank on course to continue hiking interest rates for a while. “It is too early to interpret higher continuing claims as a signal of a loosening labour market,” said Isfar Munir, an economist at Citigroup in New York. “The holiday time is generally not attractive to workers to start a new job, compounded by many firms temporarily closing during the holiday period.” Initial claims for state unemployment be...